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An equity loan is a mortgage placed on real estate in exchange for cash to the borrower. For example, if a person owns a home worth $100,000, but does not currently have a lien on it, they may take an equity loan at 80% loan to value (LTV) or $80,000 in cash in exchange for a lien on title placed by the lender of the equity loan. Many lending institutions require the borrower to repay only an interest component of the loan each month (calculated daily, and compounded to the loan once each month). The borrower can apply any surplus funds to the outstanding loan principal at any time, reducing the amount of interest calculated from that day onwards. Some loan products also allow the possibility to redraw cash up to the original LTV, potentially perpetuating the life of the loan beyond the original loan term. The rate of interest applied to equity loans is much lower than that applied to unsecured loans, such as credit card debt. The reasoning behind this is that equity loans involve collateral, and credit card debt does not. This economics or finance-related article is a stub. You can help Wikipedia by expanding it.Categories: Personal finance | From Wikipedia under the
GNU Free Documentation License What are the benefits of a home equity loan? Q. What are some benefits of a home equity loan? How does it work? Whats a good interest rate for someone with OK credit? My is good, but my husbands is fair. We are planning on consolidating high interest cards and possibly using sometowards a newer vehicle. Asked by cheerful2 - Thu Mar 29 16:28:14 2007 - - 5 Answers - 0 Comments A. The rate will be somewhere between 7-8% right now. The main benefit is its tax deductibility. You'll be able to finance high rate credit card debt at a much lower rate and get a tax deduction. You also be able to spread the payments over a longer period of time. Home Equity Lines of Credit generally only require an interest only payment while a home Equity loan is generally amortized over 10 years. Just be careful, you're potentially spending your home's equity on frivolous items. Answered by nickfromct - Thu Mar 29 16:37:49 2007 can you refinance a home equity loan to lower the payments? Q. My mother signed a home equity loan with my grandfather who has just passed, and I am trying to help her pay the bills but the payment on the house is too high. If she refinances could her payment go down? Are there any other options, or any kind of loans or help from anywhere? I am totally clueless this was very unexpected. Asked by erieanna c - Mon Mar 17 01:06:06 2008 - - 2 Answers - 0 Comments A. If she has the income she can get a different mortgage and they will pay that one off. If her interest rate goes down and fees aren't high the payment could be less. Answered by shipwreck - Mon Mar 17 01:23:45 2008 My parents are taking out a home equity loan to lend me money to start a business, does anyone get taxed?
Q. I'm looking to open a shop and my parents offered to lend me some money to help out. They are taking out a home equity loan to lend me about $35,000 to $55,000. I agreed to pay them back. Because they are taking out a loan do they have to pay any taxes? Do I have to pay taxes on this money? I don't have any assets so I wouldn't be able to get a loan for the amounts of money I posted. Asked by Felt B. - Sat Nov 24 19:37:34 2007 - - 3 Answers - 0 Comments A. not unless you are going to pay them any interest on the loan!!! sure hope you make it -- hate to see your folks lose there home!!! Answered by mister ed - Wed Nov 28 09:30:31 2007 From Yahoo Answer Search: "equity loan"  nj.com Tue, 17 Aug 2010 12:01:40 GMT+00:00 The Star-Ledger - NJ.com My brother also owned a vacation home with a $58000 home equity loan out on it. The home is valued at $12000 but we know there are major issues with it and ...  helium.com Mon, 02 Aug 2010 18:38:30 GMT+00:00 solutions Helium One of the biggest mistakes which small business owners can make is to take a home equity loan which puts their property at risk if the bank wants to call ...  caps.fool.com Sat, 14 Aug 2010 13:21:33 GMT+00:00 Motley Fool (blog) and america continues to shut down trying to... or did our politicans take out the largest home equity loan in human history to simply maintain us on life ... From Google News Search: "equity loan" From Yahoo Image Search: "equity loan"  equity-shop.co.de admin Wed, 01 Sep 2010 22:26:40 GM 2002 FIFA World Cup Korea/Japan Movie (Part 4/12). at home . equity loan. interest rate. Legally Blonde: The Harvard Variations · Alex Takes Calls About Health-Care on The Alex Jones 2/2 ... From Google Blog Search: "equity loan" |
